Research on the Effect of Welfare Benefits and Transfer Incomes on Taxpayers’ Perception in Tax and Welfare System
Asian Tax Journal Vol. 23 No. 5 (2022), pp. 183-207
Abstract
Based on the finance panel data from the Korea Institute for Public Finance, this study investigates the effect of welfare benefits and transfer incomes on taxpayers’ perception in tax and welfare system. Regarding taxpayers’ perception in tax system, as the proportion of either welfare benefits or transfer incomes out of total household income (“TI” hereafter) increases, positive recognitions on tax system grows bigger, while the level of each earning has insignificant effect on it. Moreover, as the component ratio of welfare benefits out of total household free receipts (“TR” hereafter) increases, positive recognitions on tax system grows bigger, while that of transfer incomes out of TR has insignificant effect on it. Regarding taxpayers’ perception in welfare system, as the proportion of either welfare benefits or transfer incomes out of TI increases, negative recognitions on welfare system grows bigger, and the level of welfare benefits also has negative effect on it. Moreover, as the component ration of welfare benefits out of TR increases, negative recognitions on welfare system grows bigger, while that of transfer incomes out of TR has insignificant effect on it. This study is expected to give help to make up for shortcomings of previous studies, and to provide useful policy implications on the management of future welfare system under practical tax burdens.
Keywords
- welfare system
- tax system
- welfare benefits
- transfer incomes
- finance panel data
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